Market round-up: Mobiles are talk of the town as Monitise chats to Telefonica

Monday 1 July 2013 11:43 BST

The City’s eyes flickered away from trading screens for a moment today to take a look at mobile phones.

Investors dialled up AIM-listed mobile payments group Monitise when it announced a multi-million-pound deal with Spanish telecoms giant Telefonica. Paying for and buying things on a mobile is already big business and Monitise’s house broker, Canaccord Genuity, reckoned the deal is a “game-changing contract” valued at the same size as Monitise’s deal with Visa this year of around €45 million (£38.6 million).

Telefonica’s digital arm has signed a five-year deal with Monitise to focus on UK customers initially, with overseas expansion plans to come. Monitise, which has a £530 million market cap, said the agreement will “underpin” its revenue “expectations” for 2013.

Investors piled in and it managed a 2.25p rise to 36.75p.

Also in the world of telecommunications, J Sainsbury revealed today that it will launch a mobile phone service to compete with Tesco. The supermarket giant ticked up 1.9p to 357.2p.

But the rest of the market was trying to keep its head above water after finishing both the month and the quarter down last week. On the first day in the job for Bank of England Governor Mark Carney, the FTSE 100 managed a 5.12 points rise to 6220.59. Its lift was helped by encouraging UK manufacturing data and as-expected Chinese purchasing data.

The worst performer on the benchmark index was Barclays which retreated 3.95p to 274.5p after analysts at RBC cut the price target from 375p to 360p.

On the mid-cap index, analysts at HSBC raised their price target for mail-order clothing business N Brown to 500p and rated it overweight. The group, which welcomes new chief executive Angela Spindler this month, sashayed up 5.6p to 447.6p.

Platinum miner Lonmin, which updated on repairs of one of its mines today, will see its chief executive Ben Magara assume his new role today after being appointed in April. Lonmin lurched up 4.9p to 259.3p.

Energy services group Hunting said trading was in-line with expectations and it rose 50.5p to 782.5p.

AIM-listed Fox Marble, which exports Kosovan marble from the mine which supplied marble for the construction of the White House in Washington, said it had agreed a deal to supply cut and polished marble to UK wholesaler Pisani in the UK. It was 0.25p stronger at 17.5p.

Online Israeli financial trading company Plus500 is to float in London in its crusade to raise more than £30 million on AIM.

PORTFOLIO

BUY

Thomas Cook

Snap up shares in Thomas Cook, Oriel Securities says. The travel group recently unveiled a £1.6 billion refinancing plan, and Oriel believes that with it “on a firmer financial footing... management can now concentrate on operational improvements”. Keeping their “buy” call, they say there is “further recovery potential”.

SELL

Serco

Get rid of your shares in Serco, is the call from Investec. The broker’s Gideon Adler has not been persuaded by the outsourcing giant’s update last week to change his “sell” recommendation. He has a price target of 550p for shares that currently trade at around 623p.

HOLD

Sage

Keep a tight grip on Sage, Panmure Gordon advises. It says the software firm has “a slew of new products and sales initiatives” but adds that “many initiatives have yet to move the forecast needle”. Panmure keeps its “hold” call and 318p target price for shares around 341p.